Need-To-Know Credit Questions VA Lenders Ask

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Need-to-Know Credit Questions VA Lenders Ask
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For veterans and active duty service members, the
VA guaranteed home loan program offers many
advantages.
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These loans have been designed to put home
ownership within the range of all those
individuals who are now serving their country or
have served in the past.
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Although some features of VA guaranteed loans are
different than conventional loans, such as not
requiring a down payment, other features, such as
credit considerations are similar to standard
mortgage loans.
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Credit Considerations
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Just like traditional home loans, VA guaranteed
loans require applicants to provide information
about their credit histories.
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VA mortgages do not require a minimum credit
score, nor is a maximum debt ratio to be
considered.
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Instead, the VA encourages lenders to consider
the overall lending profile to make decisions
about loans.
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Although the VA states no maximum amount for a
loan, the amount covered under the guarantee is
limited.
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In most parts of the country, loan amounts up to
417,000 do not require a down payment.
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What Is Your Credit Score?
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Generally, a credit score above 620 is favorable
to you. The credit score that consumers see is
not the same one that lenders have available.
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Under lending criteria, you may have a different
score, which may not be as favorable to your loan
application.
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Lenders also must receive scores from two or
three different credit agencies, and their choice
of score may put you below the minimum 620 number.
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If you have questions about your credit score,
asking for pre-qualification or pre-approval will
help you to determine your likelihood of success
in securing a VA guaranteed loan.
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Do You Have Any Old Collections or Judgments
on Your Record?
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The VA Lenders Handbook recognizes that old
collections or judgments on an applicants record
can indicate that the individual may be a poor
risk for a loan.
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However, the size of the unpaid amount may have a
bearing on whether the lender will approve a loan.
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Generally, lenders have a cap on these debts, and
if the amount is above their limit, the loan will
be denied.
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If any of the unpaid debt is to the federal
government, the loan will be denied. Setting up a
payment plan to manage the debt can often satisfy
their requirements for approval of a loan.
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Do You Have A Bankruptcy or Foreclosure on Your
Record?
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A bankruptcy or foreclosure will cause the lender
to impose a waiting period after the event before
considering your application for a home loan.
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After a foreclosure or short sale, you will be
required to wait 24 to 36 months after the
completion of the proceeding.
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For a Chapter 7 bankruptcy, the waiting period is
24 to 36 months. For a Chapter 11 bankruptcy, the
waiting period is 12 to 36 months.
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The strength of your overall credit will be
considered in the amount of time you are required
to wait to get a loan.
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Is Your Income Stable?
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The lender will require you to prove that your
current income is stable and sufficient to cover
the loan payments on a regular basis.
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They will calculate your ability to pay the
mortgage amount plus ordinary living expenses.
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Some types of income will not be considered in
regard to home loans for veterans, such
as part-time work you have only done for a short
period or alimony payments.
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Our VA Loan Specialist helps veterans obtain the
loans they are entitled to.
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He served in the United States Marine Corps, and
now devotes himself to the Veteran home buyer in
the Phoenix area, fulfilling a passion of his
while at the same time helping others achieve
home ownership.
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Be a proud homeowner today.
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For more details call 480-351-5904 or visit the
site www.valoansforvets.com
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VA Loans for Vets 7702 E. Doubletree Ranch Road,
Suite 220 Scottsdale, AZ 85258 Phone (480)
351-5904 Email jimmyv_at_fcbmtg.com